/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/990119.MBXT R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 19, 1999, Vol. 3, No. 12 Headlines 2CONNECT EXPRESS: BDO Seidman To Audit Financial Statements ACCESS BEYOND: Committee Objects To Emerald Asset ACCESS BEYOND: Committee Seeks Chapter 11 Trustee ACCESS BEYOND: Seeks Extension of Exclusive Periods ARROW AUTOMOTIVE: Committee Taps PricewaterhouseCoopers CADET MANUFACTURING: Bankruptcy Filing Seeks Breathing Room COLOR TILE: Seeks Extension of Exclusive Periods CRIIMI MAE: DCR Removes Transactions From Rating-Watch Down CROWN BOOKS: Panel Files Suit To Void Lender Liens FASTCOMM: Second Amended Plan of Reorganization GITIC: China Courts Declare GITIC Bankrupt H&N ELECTRIC; Files For Chapter 11 Reorganization HOMEPLACE STORES: Substitution of Attorneys for Committee IFUSION COM: Chapter 11 Plan of Liquidation INT'L WIRELESS: Seeks Exclusivity Through Confirmation MOLTEN METAL: Trustee Seeks Nod For $6 Million Payout PERK DEVELOPMENT: Taps Special Tax Accountants PHYSICIANS RESOURCE: Announces Further Developments LIBERTY HOUSE: Buyer Of Debt Is Busy MCCULLOCH: Strategic Distribution Suffers Loss of $1.1M PHP HEALTHCARE: Committee Backs Rejection of Contract SGL CARBON: Official Committee of Unsecured Creditors SYQUEST TECHNOLOGY: Seeks To Employ Investment Banker Meetings, Conferences and Seminars ********* 2CONNECT EXPRESS: BDO Seidman To Audit Financial Statements ----------------------------------------------------------- At the time of the 2Connect Express Inc.'s initial public offering, the company's balance sheet for the fiscal year ended December 31, 1996 and the related statements of operations and deficit accumulated during the development stage, shareholders equity and cash flows for the period from April 19, 1996 (date of inception) to December 31, 1996 were audited by the independent accounting firm of KPMG LLP, formerly known as KPMG Peat Marwick LLP ("KPMG"). KPMG expressed its unqualified opinion as to such financial statements of the Company in its report dated February 20, 1997, except as to the last paragraph of Note 9, which is as of May 5, 1997. On November 21,1997, the Company changed its fiscal year end to the Saturday nearest January 31, in conformity with the National Retail Federation fiscal calendar. The Company filed a Form 8-K on December 3, 1997 giving notice of this change and the Company's intent to reflect the fiscal year transition on Form 10-KSB for the year ended January 31, 1998. The Company filed for bankruptcy on January 12, 1998. Subsequently, the U.S. Bankruptcy Court, Southern District of Florida, did not authorize the expenditure of the Company's funds for an audit. Therefore, the Company was unable to engage KPMG to complete an audit of the Company's financial statements for the one month ended January 31, 1997 and the year ended January 31, 1998. As a result of the Company's failure to have an audit completed, the Company did not file a Form 10-KSB for such fiscal year. There were no disagreements during 1996 or 1997 or any subsequent interim periods to such years between the Company and KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of KPMG would have caused it to make reference to the subject matter of the disagreement in its report. Since its emergence from bankruptcy, the Company contacted KPMG regarding its audit. However, KPMG has declined to stand for reelection which was confirmed by its letter to the Company dated January 8,1999. On January 7, 1999, in anticipation of KPMG's declination to stand for reelection, the Company engaged BDO Seidman, LLP ("BDO Seidman") as the successor independent auditor, which engagement was approved by the Board of Directors of the Company on the same date. BDO Seidman is an international accounting and consulting organization with three offices in Florida. BDO Seidman was engaged on January 7, 1999 to audit the Company's financial statements for the one-month ended January 31, 1997 and the fiscal year ended January 31, 1998. The Merger described in Item 1 of the Company's Form 8-K for the event dated December 31, 1998 filed on January 8, 1999 results in a change of control of ownership of the Company. BDO Seidman has advised the Company that the financial statements of the Company for the years prior to 1999 would include only the results of operations of Bobby Allison as a result of the change in control. Consequently, BDO Seidman has been engaged to audit the Company's financial statements for the year ended December 31, 1998 which will be the historical financial statements of Bobby Allison. The Company anticipates filing a Form 10-KSB for each such years as soon as the audits are available. ACCESS BEYOND: Committee Objects To Emerald Asset ------------------------------------------------- The Official Committee of Unsecured Creditors of Access Beyond Technologies, Inc. n/k/a Hayes Corporation (Hong Kong) Limited, et al., objects to the debtors' application to retain and employ Emerald Asset management, LLP. The Committee objects to the employment of this auctioneer only to extent of its limited concern that confirmation is received from Volpe, Brown Whelan & Company that it has no claim to a commission from the Emerald auction. In the event that Volpe Brown makes a claim, the Committee reserves the right to object to the Emerald application in order to avoid duplication of compensation. Volpe, Brown is the debtors' investment banker, and although the debtors have advised the committee that they do not believe that Volpe Brown is entitled to a commission if Emerald auctions the assets, the Committee is concerned about this issue because the debtors and Volpe Brown are in disagreement over whether commissions should be paid to Volpe Brown in connection with a sale of the intellectual property. ACCESS BEYOND: Committee Seeks Chapter 11 Trustee ------------------------------------------------- The Official Committee of Unsecured Creditors seeks entry of an order authorizing the Committee to file under seal its emergency motion for appointment of a Chapter 11 Trustee, or in the alternative, for conversion of Chapter 11 cases to cases under Chapter 7. The Committee has lost confidence in the debtors' Boards of Directors to properly manage and oversee the liquidation and therefore has requested the appointment of a Chapter 11 trustee or, in the alternative, the conversion of the case. The Committee seeks authority to file the Trustee Motion under seal due to confidentiality agreements with the debtors. Because the Trustee motion contains information that the debtors may assert is confidential, the Committee seeks authority to file it under seal. ACCESS BEYOND: Seeks Extension of Exclusive Periods --------------------------------------------------- Access Beyond Technologies, Inc. n/k/a Hayes Corporation (Hong Kong) Limited, et al., seeks an order extending the exclusive periods to file a plan and solicit acceptances thereof. The debtors seek to extend the period during which the debtors have the exclusive right to file a chapter 11 plan or plans through and including June 7, 1999, and to extend the period during which the debtors have the exclusive right to solicit acceptances thereof and together with the Exclusive Filing Period through and including August 5, 1999. The debtors anticipate that, if sufficient consideration is realized by the sale of their assets, they will file a liquidating plan. Until the outcome of the auction of their machinery equipment and inventory ant their Norcross, Georgia facility and the sale of their assets in bulk or part, the debtors will not be in a position to propose and file a confirmable Chapter 11 plan. ACME METALS: Alpha Tube Seeks Independent Committee ---------------------------------------------------- The Unofficial Committee of Alpha Tube Trade Creditors submits a notice of filing of statements in support of a motion for appointment of an independent committee of creditors of Alpha Tube Corporation. The following creditors of Alpha a Tube Corporation have joined the Alpha Tube Creditors in expressing their support for the motion of the unofficial Committee of Alpha Tube creditors for an order directing the appointment of a committee of unsecured creditors of Alpha Tube Corporation: AK Steel Corporation, Delaco Steel Corporation, Interim Personnel of Lima Inc., Marubeni America Corporation, Pittsburgh Logistics Systems, Inc., Rouge Steel Company, Weirton Steel Corporation, and Wheeling-Pittsburgh Steel Corporation. Each of the above-listed creditors filed a statement in support of creation of a Committee of Unsecured Creditors for Alpha Tube Corporation. ARROW AUTOMOTIVE: Committee Taps PricewaterhouseCoopers ------------------------------------------------------- The Official Committee of Unsecured Creditors of Arrow Automotive Industries, Inc. applies to the court for an order approving the appointment of PricewaterhouseCoopers as accountants and financial advisors to the Committee nunc pro tunc to November 16, 1998. The firm will investigate and assess, as the Committee believes may be necessary and appropriate, certain historical transactions, including, but not limited to , payments to officers, insider transactions and related- party transactions, fraudulent transfers and preferences; The firm will review and analyze and advise the Committee concerning the debtor's weekly operating reports prepared by The Recovery Group. The firm will compare and contrast strategies of liquidation, sale of assets, or sale of the debtor's business, to determine the maximum potential for recovery by the unsecured creditors' The firm will review and assess business plans and proposed plans or reorganization and advise the committee in connection with the negotiation and formulation of a plan; assist in the development of financial information for alternative plans of reorganization and participate in negotiations on behalf of the Committee with the debtor and debtor's counsel. The firm will charge its normal hourly rates ranging from $350-$400 per hour form partners to $60-$75 per hour for paraprofessionals. CADET MANUFACTURING: Bankruptcy Filing Seeks Breathing Room ----------------------------------------------------------- As reported in the Columbian on January 14, 1999 when Cadet Manufacturing of Vancouver files papers in federal courtin Tacoma for bankruptcy protection it "changes the playing field" in the company's battle to remain solvent in the face of legal and financial challenges, says a local bankruptcy specialist. Jeff Meehan, an attorney with Landerholm Memovich Lansverk & Whitesides, who has no interest in the Cadet case, offered this "primer" on the process: Effect on other litigation: "When a **bankruptcy** is filed, an automatic "stay" goes into effect, halting all pending claims against the debtor (Cadet). The phone company can't even send out a collection notice threatening to cut off service." Meehan said it will stop the scheduled action Friday in King County Superior Court in Seattle pertaining to a possible class-action suit against Cadet. "The state courts (including county superior courts) no longer have jurisdiction to hear it," he said. Formulation of a plan: "The (bankruptcy) action gives the debtor breathing room of at least four months, maybe more, to formulate a plan that will have to include how they will deal with" the potential class-action suit and its debts. "It's a strategic ploy to stop the litigation and shift the field of play. The rules give the debtor more of a home field advantage, at least in the initial few months of the case. But it isn't the ultimate answer." Plaintiff's next step: "If they are smart, they will remain highly organized. An 'official unsecured creditors committee' may be set up by them, if there's interest." The unsecured creditors, Meehan said, would include owners of recalled Cadet heaters. He said attempts will be made to contact such "creditors," asking if they wish to be represented on the committee. "The bankruptcy court will set a procedure for dealing with the claims against Cadet," and could actually send the case back to King County Court, although that seems unlikely in this case, he added. "The official unsecured creditors committee will carry a lot of weight. It can file its own reorganization plan (for the judge to consider) after four months." In any case, a reorganization plan presumably would be worked out largely through negotiations with all parties before it is presented to the bankruptcy court judge. Close the business? Meehan said the bankruptcy court seeks solutions that keep the debtor solvent. "If Cadet can show in its plan ... that it wouldn't be able to afford to send an electrician" to every heater owner and replace all units, "they won't be required to do so. Public policy isn't to be punitive and force a company out of business. It's to give the consumer the benefit of the bargain. COLOR TILE: Seeks Extension of Exclusive Periods ----------------------------------------------- Color tile, Inc. and its debtor affiliates seek an order extending, for a period of 180 days the debtors' exclusive period s in which to file a plan or plans of reorganization and to solicit acceptances thereof. The debtors seek to extend the period to file a plan of reorganization from January 11, 1999 through and including July 12, 1999; and for the period to solicit acceptances from March 11, 1999 through and including September 7, 1999. The debtors state that they are in the midst of a critical period in these cases. Until the litigation claims are resolved or near resolution, the value of the debtor's estates is highly speculative. Until the conclusion of the pending adversary proceedings, it is unlikely that the debtor can effectively prepare a Chapter 11 plan at this time. The debtor's' remaining assets consist of claims and causes of action against pre-petition transferees and other third parties. The Creditors' Committee has been actively pursuing these claims on behalf of the debtors. The Creditors' Committee and its professionals have evaluated several thousand potential claims and commenced approximately 2,500 adversary proceedings. About 240 of these actions are currently being actively litigated, and will undoubtedly take several more months. In the meantime, the debtors believe that the ability to maximize the value of such assets would be compromised if the control of such litigation and these cases were disrupted by filing of competing chapter 11 plans. CRIIMI MAE: DCR Removes Transactions From Rating-Watch Down ----------------------------------------------------------- Duff & Phelps Credit Rating Co. (DCR) has removed five commercial mortgage-backed securities (CMBS) transactions from Rating Watch--Down as a result of CRIIMI MAE Services, L.P. (CRIIMI), a subsidiary of CRIIMI MAE Inc., being replaced as the special servicer by Banc One Mortgage Capital Markets, LLC (BOMCM). All DCR-rated classes of the following transactions are removed: Asset Securitization Corporation, Series 1995-MD IV Asset Securitization Corporation, Series 1996-D2 First Union-Lehman Brothers Commercial Mortgage Trust II, Series 1997-C2 Morgan Stanley Capital I Inc., Series 1998-WF1 Nomura Asset Securities Corp., Series 1998-D6 DCR had placed 13 transactions on Rating Watch-- Uncertain in connection with the bankruptcy filing by CRIIMI MAE Inc. from its creditors under Chapter 11 of the United States Bankruptcy Code on October 5, 1998 (see DCR's press release dated October 5, 1998). On October 8, 1998, DCR removed DLJ Mortgage Acceptance Corp., Series 1995-CF2 from Rating Watch--Uncertain as a result of the controlling class for the transaction replacing CRIIMI as the special servicer (see DCR's press release dated October 8, 1998). On October 22, 1998, DCR changed the watch status from 'Uncertain' to 'Down' for the remaining 12 transactions following DCR's determination that the bankruptcy* could potentially have negative implications for the transactions. Subsequently, Wisconsin Avenue Securities was removed from Rating Watch--Down on December 2, 1998, following the completion of the special servicing transfer from CRIIMI to BOMCM (see DCR's press release dated December 2, 1998). Furthermore, four additional transactions were removed from Rating Watch--Down on January 5, 1999, following the completion of the special servicing transfer from CRIIMI to BOMCM for the following transactions: Mortgage Capital Funding Inc., Series 1997-MC1, Asset Securitization Corporation, Series 1996-D3, LB Commercial Mortgage Trust II, Series 1996-C2, and Morgan Stanley Capital I Inc., Series 1998-WF2 (see DCR's press release dated January 5, 1999). Although DCR has been informed that CRIIMI MAE Inc. intends to appoint BOMCM as the special servicer for the remaining three transactions currently on Rating Watch--Down, DCR has not received notification from the trustees of these transactions that the transfers have been completed. Therefore, the following transactions remain on Rating Watch--Down: Merrill Lynch Mortgage Investors Inc., Series 1995-C3 Merrill Lynch Mortgage Investors Inc., Series 1996-C2 Mortgage Capital Funding Inc., Series 1994-MC1 CROWN BOOKS: Panel Files Suit To Void Lender Liens -------------------------------------------------- Crown Books Corp.'s official committee of unsecured creditors filed a lawsuit against one of the company's prepetition lenders seeking to void liens and security interests on certain company assets. The suit charges that the liens and security interests of The CIT Group/Business Credit Inc. on Crown's inventory and proceeds located in New Jersey and Pennsylvania, which were used to secure certain antecedent debts, are the product of preferential transfers and must be avoided. (Federal Filings Inc. 15- Jan-99) FASTCOMM: Second Amended Plan of Reorganization ----------------------------------------------- The debtor, Fastcomm Communications Corporation proposes a Second Amended Plan of Reorganization under Chapter 11. The plan provides for the treatment of each class of claims and administrative expenses as follows: Class 1 - Allowed Unsecured Nonpriority Claims of Convertible Debenture Holders - impaired. The holders of Class 1 claims will be required to convert all outstanding debentures within six months of the Effective Date. Such conversion shall be at the current market price. In addition, all penalties will be waived. Class 2 - Allowed Unsecured Nonpriority Claims equal to or less than $1,000 - impaired. The holders of Class 2 claims, and any holders of Class 3 Allowed claims which elect to reduce their claims to $1,000 will be paid in full within 30 days from he Effective Date. Class 3 - Allowed Unsecured Nonpriority Claims Greater than $1,000 - impaired. Holders of Class 3 Claims will receive a combination of cash and securities in full satisfaction of their claims. An initial cash distribution will be made equal to 12% of all Allowed Class 3 claims. And an additional 12% will be reserved for disputed, unliquidated and/or contingent claims. Class 3 holders will then receive a debenture in the face amount of the remaining 75% allowed claim. Class 4 - Unsecured Nonpriority Contingent Claims of the SEC, to the extent allowed - not impaired. FastComm is reasonably confident that this matter will reach settlement. The Reorganized debtor may not disburse more than $50,000 toward such settlement without further order of the court. Class 5 - Allowed interests of equity security holders - impaired. The Equity security Holders shall retain their respective Interests in FastComm as of the Effective Date. No cash dividends shall be paid until the earlier of full redemption and/or conversion of the Class 3 Debentures or expiration of the Class 3 Debenture Conversion Period. The Equity Security Holders acknowledge that the plan provides of the dilution of their interests in the Reorganized Debtor. Specifically the proposed treatment of Class 3 Claims provides for the issuance or potential issuance of additional stock in the debtor upon conversion of the Class 3 Debentures. In addition, the plan includes a private placement new equity investment of $1 million which would also dilute the existing shareholders' interests in the reorganized debtor. The private placement contemplates the issuance of warrants together with the stock purchases. The subsequent exercise of those newly issued warrants would further dilute the existing shareholders' interests in the reorganized debtor. Current management of FastComm will remain in place until further notice to all interested parties. Allowed Administrative Claims - Paid in full in cash on the effective date if not previously paid pursuant to orders of court. A hearing will be held on January 25, 1999 at 1:30 PM in Courtroom III, Martin V. B. Bostetter, Jr. U.S. Courthouse, at 200 South Washington Street, Third floor, Alexandria, Virginia 22314 to consider the adequacy of the information contained in the proposed Disclosure Statement. FPA MEDICAL: Prudential Objects to Disclosure Statement -------------------------------------------------------- Prudential Insurance Company of America and certain of its subsidiaries, including Prudential Health Care Plan Inc. object to the proposed Disclosure statement with respect to the first amended joint plan of reorganization of FPA Medical Management, Inc. and its subsidiaries and affiliates; dated December 29, 1998. They state that the Disclosure statement should not be approved because of two defects in the plan. The plan fails to identify a means of implementing the plan. There is no exit financing and the debtors have not secured agreement with their payors, which will provide the majority of the reorganized debtors' cash flow. Secondly, the plan affords broad releases to certain non-debtor parties without any consideration whatsoever. GITIC: China Courts Declare GITIC Bankrupt ------------------------------------------ Chinese courts have declared the investment arm of one of the country's richest provinces bankrupt, Hong Kong newspapers reported Sunday. The decision on the company known as GITIC makes it communist China's biggest bankruptcy case ever. Courts in the southern cities of Guangzhou and Shenzhen on Friday accepted the application for bankruptcy protection by Guangdong International Trust and Investment Corp. and three of its subsidiaries, said a report in the Hong Kong edition of Wen Wei Po, a mouthpiece for the China's Communist Party. GITIC has $4.3 billion in debts and assets of only $2.6 billion. It is the first non-banking financial firm to go bankrupt since the founding of communist China in 1949. It also involves more money than any previous Chinese bankruptcy, Wen Wei Po quoted court president Lu Botao as saying. "GITIC's bankruptcy according to law follows the principle of survival of the fittest under a market economy and accords with international practice," the Hong Kong Standard quoted Lu as saying. The proceedings will serve as a test case for China's legal system in its handling of failed Chinese financial firms. When the government dissolved failed financial institutions in the past, it paid off creditors. The court decision was read in Guangdong High People's Court Saturday to about100 foreign creditors and 50 domestic creditors. The decision did not say how much of the debt much of which is owed to foreign banks could be repaid, nor did it say whether foreign creditors would receive the same treatment as their Chinese counterparts. GITIC, once one of China's most prominent financial institutions, declared insolvency and closed down in October after failing to repay foreign and domestic loans. Its three failed affiliates are Guangxin Enterprises Development, Gaungdong International Leasing and Gitic Shenzhen. As the investment arm of Guangdong, the fast-growing province bordering Hong Kong, GITIC borrowed loans and issued bonds overseas to finance local projects. But it also invested in stock and property deals that went sour. The collapse of GITIC, China's second-largest trust company, shook confidence in China's financial system. International credit-ratings agencies have since downgraded the overseas debt of many trusts. At least three other state-backed companies also disclosed their insolvency last week. H&N ELECTRIC; Files For Chapter 11 Reorganization ------------------------------------------------- As reported in the Journal Business Spokane on December 23, 1998, H&N Electric-Spokane Inc., a Spokane company that sells and repairs electric motors, air compressors, and pumps, has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company, located at 5511 E. Broadway, listed assets of about $913,000 and liabilities of more than $1.1 million in its filing here on Dec. 7. The company declined comment on the reorganization and the factors leading to the filing. Its attorney couldn't be reached for comment. More than half of the liabilities, about $738,000 worth, involved creditors holding unsecured claims, primarily for various business expenses. Almost $389,000 of the liabilities involved creditors holding secured claims, including a pair of claims from Sterling Savings Bank totaling more than $242,000. Heavy equipment and accounts receivable make up the bulk of the company's reported assets. H&N Electric had revenue of about $3.9 million in 1996 and $4.4 million in 1997, but its sales have dropped to about $1.9 million this year, bankruptcy records say. Joe Hodl and Gary Naccarato started the company here 18 years ago. As business increased, H&N opened offices in Pasco, Wash., and Butte, Mont. Six years ago, the two men decided to end their partnership and split the business. Hodl took the Spokane operation, and Naccarato took the Pasco operation. They shut down the Butte facility. In June 1997, the company said it employed 53 people, including five at Agri- Service--a Lind, Wash., company that sells agricultural pumps. Copyright Northwest Business Press Inc. Dec 23, 1998 HOMEPLACE STORES: Substitution of Attorneys for Committee --------------------------------------------------------- Dewey Ballantine, L.P. withdrew as counsel to the Ad Hoc Committee of Preferred Shareholders. McDonald, Hopkins, Burke & Haber Co., L.P.A. is replacement counsel. IFUSION COM: Chapter 11 Plan of Liquidation ------------------------------------------- The Bankruptcy Court for the Southern District of New York approved the First Amended Disclosure Statement for the First Amended Chapter 11 Plan of Liquidation for Ifusion Com Corporation, the debtor. The hearing to consider confirmation of the plan shall be held on February 11, 1999 at 2/30 PM before the Honorable Prudence Carter Beatty, Room 701, U.S. Bankruptcy Court, One Bowling Green, New York , NY 10004-1408. The treatment of Claims is as follows: Class 1 - Secured Claims of the Funders are impaired - by agreement the Funders have waived any distributions under the plan. Class 2 - priority non-tax claims are not impaired. Each holder shall be paid the full amount, without interest, in cash from the Confirmation Account, when the Plan Administrator, in consultation with the Committee determines that sufficient funds exist for a distribution. Class 3 - Priority tax claims - not impaired. Paid from the confirmation Account when the Plan Administrator in consultation with the Committee determines that sufficient funds exist for a distribution. Class 4 - Showtime Allowed Secured Claim - not impaired. Paid from the escrow account, the amount of its Allowed Secured Claim, up to $30,000. Class 5 - General Unsecured Claims are Impaired. The holders of allowed general unsecured claims shall receive, in full satisfaction, their pro-rata share of available cash, in one or m ore distributions, after all senior classes of claims have been paid in full, in accordance with the plan. Class 6 - Unsecured Claims of the Funders are impaired. No distribution shall be made in consideration of a general release granted in favor of the funders in behalf of the debtor, the Committee and the debtor's estate. Class 7 - Interests are impaired. The holders of an interest in the debtor shall not receive any distribution under the plan. All Class 7 interests are deemed canceled, null and void and of no force and effect.. The holders of Class 7 interests are deemed to have rejected the plan. INT'L WIRELESS: Seeks Exclusivity Through Confirmation ------------------------------------------------------ International Wireless Communications Holding Inc. is seeking a brief extension of the exclusive periods to file a reorganization plan and solicit plan acceptances to complete the plan confirmation process "well underway." The extension is being sought, "solely out of an abundance of caution to maintain the Exclusive Periods through the schedule contemplated for Plan confirmation and to allow for some additional time if unexpected delays are encountered." The court has scheduled the confirmation hearing on IWCH's second amended reorganization plan just days after the hearing on BT Foreign Investment Corp.'s motion to appoint an examiner to investigate several prepetition transactions.( Federal Filings Inc. 15-Jan-99) MOLTEN METAL: Trustee Seeks Nod For $6 Million Payout ----------------------------------------------------- Molten Metal Technology Inc.'s Chapter 11 Trustee is seeking approval to distribute about $6 million in asset sale proceeds to postpetition lender MMT Recovery LLC. Noting that funds will only be distributed if senior liens on the wet waste assets as well as trustee and profession carveouts are satisfied, the trustee reserved the right to request disgorgement of any portion of the payout from the lender needed to settle the above accounts. As of the motion date, Trustee Stephen Gray had received about $10.7 million in sale proceeds. (Federal Filings Inc. 15- Jan-99) PERK DEVELOPMENT: Taps Special Tax Accountants ---------------------------------------------- The debtors, Perk Development Corporation and Brambury Associates seek to employ Brovitz, Insero, Kasperski & Co., P.C., as their special tax accountants. The debtors wish to engage the firm to prepare the debtors' 1997 and 1998 tax returns and any tax compliance services related tot the preparations of such returns. The firm has filed a $56,163 unsecured claim in both Perk's and Brambury's cases. The firm has agreed o waive such claims as a condition to their employment as special tax accountants. The debtors will pay the firm between $5,900 and $8,850 for the preparation of each tax return. PHYSICIANS RESOURCE: Announces Further Developments --------------------------------------------------- Physicians Resource Group, Inc. (NYSE:PRG) announced that the time period has expired during which NationsBank had agreed not to take any action with respect to its $9.5 million loan to the Company due December 31, 1998 that is in default. The Company continues to conduct discussions with NationsBank and the individual guarantors of the NationsBank loan with the goal of obtaining an acceptable arrangement to permit the Company to pursue its restructuring. However, no assurance can be provided that NationsBank will not take action to enforce fully its rights under its loan agreement with the Company. PRG is a provider of physician practice management services to eye care practices and operates ambulatory surgery centers. LIBERTY HOUSE: Buyer Of Debt Is Busy ------------------------------------ As reported in the Honolulu Star-Bulletin on December 22, 1998 business is picking up for Aurel Capitol, LLC, the New York investment firm that so far has acquired 56 claims from vendors owed money in the Liberty House bankruptcy. Aurel, which speculates on bankruptcy claims, bought the Liberty House claims -- totaling $109,630 -- at an undisclosed discount. A Manoa woman said she turned down an offer of $40 for her $806 claim - - about 5 cents on the dollar. Aurel officers note that claims trading is common in mainland bankruptcies, including the current Chapter 21 bankruptcy of department store chain Montgomery Ward. Buyers hope to collect their claims at a higher rate at the end of a bankruptcy, while sellers settle for less. While Hawaiian Airlines, which emerged successfully from bankruptcy in 1994, repaid its creditors in full with shares of its stock, reorganizations often results in repayment below face value of claims. Aurel filed its first batch of 14 claim transfers, totaling $39,397, in U.S. Bankruptcy Court on Dec. 7. The company on Dec. 10 added 42 transfers totaling $70,233. Most of the Liberty House vendors choosing to sell their claims -- ranging from several hundred to several thousand dollars -- are mainland companies. More than 5,000 claims have been filed against Liberty House in its Chapter 11 bankruptcy, claims that are on hold until the retailer emerges from its reorganization with a court-approved plan to repay its debts. Attorneys involved in the case say it should be completed by June, more than a year after Liberty House filed for bankruptcy protection last March. Copyright Hawaii Newspaper Agency Dec 22, 1998 MCCULLOCH: Strategic Distribution Suffers Loss of $1.1M ------------------------------------------------------- McCulloch Corp., an international manufacturer of gasoline- powered and electric portable outdoor equipment, filed chapter 11 this week, according to a newswire report. Strategic Distribution Inc. announced yesterday that it has incurred an estimated pre-tax loss of up to $1.1 million because of the filing. McCulloch has not paid invoices due to Strategic Distribution. That and the value of inventory specially held for McCulloch totals about $1.1 million. (ABI 15-Jan-99) PHP HEALTHCARE: Committee Backs Rejection of Contract ----------------------------------------------------- The Official Unsecured Creditors Committee for PHP HealthCare Corporation, debtor, supports the rejection of the Employment Agreement with Jack M. Mazur for "cause". SGL CARBON: Official Committee of Unsecured Creditors ----------------------------------------------------- The U.S. Trustee acting in SGL Carbon Corp.'s chapter 11 case has appointed an official committee of unsecured creditors. The panel consists of the following creditors: North Star Steel Co.; Ameristeel Corp.; SMI Steel Inc.; The Timken Co. TAMCO Newport Steel Corp. Cascade Steel Rolling Mills Inc.; Republic Engineered Steels Inc.; Conoco Inc. (The Daily Bankruptcy Review and ABI Copyright c January 15, 1999. SYQUEST TECHNOLOGY: Seeks To Employ Investment Banker ----------------------------------------------------- On February 1, 1999, at 2:00 PM, the Honorable Leslie J. Tchaikovsky will hear the application of SyQuest Technology Inc. to employ the firm of CIBC Oppenheimer Corporation as its financial advisor during the pendency of this case. Meetings, Conferences and Seminars ---------------------------------- January 28-February 1, 1999 COMMERCIAL LAW LEAGUE OF AMERICA 38th Annual Southern District Meeting Royal Sonesta Hotel, New Orleans, Louisiana Contact: 1-423-971-1551 February 4-6, 1999 AMERICAN BANRKUTPCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800 February 18-21, 1999 COMMERICAL LAW LEAGUE OF AMERICA Annual Western District Meeting Monte Carlo Hotel & Casino Resort, Las Vegas, Nevada Contact: 1-702-382-9558 Febraury 28-March 3, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Norton Bankruptcy Institute I Olympic Park Hotel, Park City, Utah Contact: 1-770-535-7722 March 18-21, 1999 NORTON INSTUTUTES ON BANKRUPTCY LAW Norton Bankruptcy Litigation Institute II Flamingo Hilton Hotel, Las Vegas, Nevada Contact: 1-771-535-7722 March 19, 1999 AMERICAN BANRKUTPCY INSTITUTE Bankruptcy Battleground West Century Plaza Hotel, Los Angeles, California Contact: 1-703-739-0800 March 25-27, 1999 Southeastern Bankruptcy Law Institute, Inc. 25th Annual Southeastern Bankruptcy Law Institute Marriott Marquis Hotel, Atlanta, Georgia Contact: 1-770-451-4448 April 15-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800 April 26-27, 1999 RENAISSANCE AMERICAN CONFERENCES & BEARD GROUP, INC. Bankruptcy Sales, Mergers & Acquisitions The Mark Hopkins, San Francisco, California Contact: 1-903-592-5169 or ram@ballistic.com April 28-30, 1999 INTERNATIONAL FEDERATION OF INSOLVENCY PROFESSIONALS INSOL Bermuda '99 Conference of the Americas Castle Harbour Marriott Resort Contact: INSOL@weil.com April 30-May 4, 1999 INTER-PACIFIC BAR ASSOCIATION Annual Meeting and conference, including a one-day program on cross-border insolvencies Shangi-La Hotel, Bangkok, Thailand Contact: 011-66-2-233-0055 June 3-6, 1999 AMERICAN BANRKUTPCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800 July 1-4, 1999 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 1-770-535-7722 July 15-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Northeast Bankruptcy Conference Mount Washington Hotel & Resort Bretton Woods, New Hampshire Contact: 1-703-739-0800 August 4-7, 1999 AMERICAN BANRKUTPCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton, Amelia Island, Florida Contact: 1-703-739-0800 September 16-18, 1999 AMERICAN BANRKUTPCY INSTITUTE Southwest Bankruptcy Conference The Hotel Loretto, Santa Fe, New Mexico Contact: 1-703-739-0800 December 2-4, 1999 AMERICAN BANRKUTPCY INSTITUTE Winter Leadership Conference La Quinta Resort & Club, La Quinta, California Contact: 1-703-739-0800 The Meetings, Conferences and Seminars column appears in the TCR each Tuesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter, co- published by Bankruptcy Creditors' Service, Inc., Princeton, NJ, and Beard Group, Inc., Washington, DC. Debra Brennan and Lexy Mueller, Editors. Copyright 1998. All rights reserved. ISSN 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for six months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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